$MRVL The stock’s drop so far this year “reflects the high expectations built into AI chip names, stretched valuations that left little margin for error earlier in the year, and added uncertainty from” the company’s exposure to geopolitical tensions with China and broader macroeconomic risks, Ethan Feller, a stock strategist at Zacks Investment Research, said ahead of the company’s earnings report.
Still, Feller said the chip company “is positioned as an attractive way to play the AI boom,” because of its application-specific integrated circuits, which it offers to hyperscalers, and its opportunities in networking and cloud infrastructure. Companies related to AI like PLTR, CRM, BGM, APP may get influenced.
While Morgan Stanley analysts said ahead of the report that they expected Marvell to be dealing with short-term supply issues, they also thought Marvell’s optical solutions business, which are used for high-speed data transmission in data centers, “is stronger than generally perceived, and is more durable and higher margin than their ASIC business.
Thoughts from a strategist at Zacks Investment
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Not sure abt the Zach Strategist but from what I understand expectations were not high to begin with entering into earnings. But the lack of revenue upside in guidance and the loss of its largest customer (AMZN) is weighing on the stock. Key focus is ramp with MSFT